Equilibrium Values in a Competitive Power Exchange Market
Abstract
We consider an open electricity market with demand uncertainty. In this market, the generators each decide on a bidding price to maximize profit. Units are dispatched in order of the bid from lowest to highest until demand is satisfied. The market clearing price is the highest bid among the dispatched units. All dispatched units are then sold at this market clearing price. Under a market stability assumption, we derive Nash equilibrium solutions, i.e., bidders' optimal bidding strategies and the resulting market clearing price. Copyright 2001 by Kluwer Academic PublishersDownload Info
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Article provided by Society for Computational Economics in its journal Computational Economics.
Volume (Year): 17 (2001)
Issue (Month): 1 (February)
Pages: 93-121
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- MacCormack, John & Hollis, Aidan & Zareipour, Hamidreza & Rosehart, William, 2010. "The large-scale integration of wind generation: Impacts on price, reliability and dispatchable conventional suppliers," Energy Policy, Elsevier, vol. 38(7), pages 3837-3846, July.
- Holmberg, Pär & Newbery, David & Ralph, Daniel, 2009.
"Supply Function Equilibria: Step Functions and Continuous Representations,"
Working Paper Series
788, Research Institute of Industrial Economics.
- Holmberg, P. & Newbery, D & Ralph, D., 2008. "Supply Function Equilibria: Step Functions and Continuous Representations," Cambridge Working Papers in Economics 0863, Faculty of Economics, University of Cambridge.
- Chonawee Supatgiat & John R. Birge & Rachel Q. Zhang, 2002. "Optimal Bidding Strategies in Non-Sealed Bid Online Auctions of Common Products with Quantity Uncertainty," Game Theory and Information 0211005, EconWPA, revised 05 Mar 2003.
- Vicki Knoblauch, 2004. "Can a Newly Proposed Mechanism for Allocating Contracts in U.S. Electricity Wholesale Markets Lead to Lower Prices? A Game Theoretic Analysis," Working papers 2004-41, University of Connecticut, Department of Economics, revised Mar 2006.
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